This article is part of the CreditUnions.com FinTech Series, a new collection of original Q&As that celebrate advancements in financial technology. Learn how your organization can participate today.
Mike Weber, Chief Marketing Officer, Credit Union Student Choice
Student loans and student debt are big business and a huge concern for credit union members and their families. Credit Union Student Choice was formed more than a decade ago as a CUSO that now helps more than 275 credit unions finance dreams and careers in what it positions as the most affordable, consumer-friendly ways available in the marketplace.
Student Choice is now taking a next step in its turnkey approach to education finance, by partnering with two innovative fintech startups that will help member-owned financial cooperatives engage young adults and families from the college decision process through graduation and beyond at a much deeper level.
They are Edmit and FutureFuel. Each sprung from the creative space at the DCU Innovation Center, a shared office and entrepreneurship facility operated by Digital Federal Credit Union ($8.9B, Marlborough, MA) in Boston.
“Their similarity ends there but the synergy is just beginning,” says Mike Weber, chief marketing officer at Student Choice.
Edmit provides credit unions with a branded, online platform that helps members compare real college costs, specific to their income and test scores, to determine the best financial and academic fit, Weber says.
FutureFuel, meanwhile, is a mobile-based platform that seamlessly transfers contributions from the employer to an employee's student loan account each month, just for starters. Student Choice is positioning FutureFuel as a benefit that credit unions can offer their own staff, to help attract and retain talented employees, and then will extend the emphasis to credit unions offering it to SEGs.
Here Weber talks with CreditUnions.com about the innovations it is bringing to the credit union student lending space with the solutions from Edmit and FutureFuel.
Student Choice has been offering a credit union-branded, holistic solution for student lending for years. Wrapping these new innovations around that core product provides credit unions the ability to add deep, lasting value to the membership they have with their members.
Please describe at a high level the Edmit and FutureFuel products that Credit Union Student Choice is offering to the nation’s member-owned financial cooperatives.
Mike Weber: Financing a college education is different than almost anything else a family will do. You know how much a car is going to cost and what your payments will be. Same with a house. With college, the costs and outcomes are not so certain.
There’s tuition, and room and board, and books, and travel, and all these things that change every year. You also have to think about what that degree you’ll be paying for is worth, what kind of salary you can expect, and how you’ll pay for any loans. I say loans, plural, because many people take on more than one loan, adding to the complexity of someone’s financial life as they’re starting out on their careers.
That’s where Edmit and FutureFuel come in. With Edmit, a user simply puts in some basic information such as grades and standardized test scores and the solution draws on multiple data sources to quickly build customized college comparisons and make recommendations. Later on, families can revisit Edmit and upload their award letters and other information to keep the advice current.
FutureFuel, meanwhile, helps student loan borrowers after they've entered the workforce, by aggregating loans in one digital place, simplifying their management. Other tools provide the mechanism to sweep employee contributions into the loan accounts, and to round up debit charges, for instance, to the nearest collar and put that spare change to work paying off student debt.
What opportunities and challenges is Student Choice addressing with these innovations?
MW: Student debt is a major concern to younger Americans. That’s hardly a secret. Another big challenge? Finding and retaining talented people to work at your credit union. FutureFuel and Edmit are great ways to address both these issues.
Edmit helps families make the most informed decision they can before committing to a school and financial obligation. FutureFuel can be an integral part of the kind of benefits package that credit unions are going to need to staff their operations with the talent they need to survive and thrive in the crowded marketplace of today and tomorrow.
We talk to a lot of HR people and we know that student debt looms large on their radar for hiring and keeping talented people. But the greatest opportunity is right in front of us. It’s in our membership.
The average age of a credit union member in the United States is 47 or 48. These are the people likely to have children either in college or on the way, and even could be considering that route for themselves. There are millions of them, ripe for the picking, and you can help them pick you with this kind of holistic approach to servicing this big part of their American dream.
For Your Viewing Pleasure:
Check out these videos done in partnership with Student Choice, Edmit and FutureFuel.
How do these innovations increase member value?
MW: Edmit, FutureFuel, and Student Choice empower you to offer your members and employees unprecedented insight and flexibility around financing an education for themselves and or any family member.
Student Choice has been offering a credit union-branded, holistic solution for student lending for years. Wrapping these new innovations around that core product provides credit unions the ability to add deep, lasting value to the membership they have with their members. Plus, unlike so much “financial education” content that sits on websites unused, these are dynamic tools that build engagement simply through their interactive use.
Also, besides the built-in original loans and refinancing that credit unions can include in the Student Choice-Edmit-FutureFuel integration, there’s the engagement that you can expect to foster for years to come. Car loans, mortgages, investments, the whole life cycle.
How many credit unions are using these solutions, and what kind of ROI can they expect?
MW: We’ve just started out with these. Only a couple of credit unions are live now, but we'll have several more coming on soon, and expect that to continue growing throughout the year. We expect more, and soon, of course. Interestingly, they range from smaller SEG-based operations to very large community credit unions.
Back to the employee benefit point for a moment. There’s a 2017 survey that shows 86% of young workers would commit to working five years for an employer that would help them repay their student loan debt. How would doing that compare to the costs of identifying, hiring, and training a new employee a lot more often than that?
There’s nothing exactly like these in the marketplace right now, and we’ll be pricing Edmit and FutureFuel in ways that will make it very affordable for any size credit union to take their education finance offerings to a whole new level of engagement and service.